In North Carolina, any gambling winnings are considered taxable income, regardless of the amount won. This is different from many individuals’ belief that they can offset gambling wins and losses on their taxes, similar to capital gains or cryptocurrency. In reality, if you win anything, you are required to pay taxes on it under state law and may also owe taxes to the federal government.
Even small wins in North Carolina are subject to taxation. Individuals such as Cherie Franklin and Gene Washington, who enjoy betting on sports but do not win substantial amounts, may still owe taxes on their winnings. It may be tempting to ignore reporting smaller wins, but it is essential to adhere to tax regulations to avoid legal consequences.
When it comes to gambling losses in North Carolina, taxpayers cannot deduct them from their winnings. Even if an individual loses more money than they win, they are still required to pay taxes on any amount won. Sportsbook apps make it easier for tax authorities to track winnings as users receive official tax forms if they exceed a certain threshold.
NC State economist Nathan Goldman emphasizes that gambling winnings have always been seen as taxable income in North Carolina. Sportsbook apps make it easier for users to track their gambling activity and income, leading to increased tax compliance. If an individual does not receive a tax form due to not reaching the $600 threshold with any one sportsbook, they are still obligated to report their winnings and pay taxes on them.
It is crucial for individuals who engage in gambling activities in North Carolina and at the federal level understand their tax obligations related to these activities fully. Failing to report gambling income can lead to penalties and legal consequences.
In summary, North Carolina treats all gambling winnings as taxable income under state law and federal law. Even small wins are subjected
